Customs duty is assessed on the fair market value of imported goods at the time they are landed in the UK and worth more than £135 (~$170). Import prices for products entering the UK generally consist of: Cost, Insurance, Freight and Duty, with a standard VAT of 20% levied at the border on the aggregate value. VAT is reduced to 5% for some goods and services such as children’s car seats and home energy. VAT is further reduced to 0% for certain goods such as food and children’s clothing. More information on VAT, including how to charge for VAT on consignment of goods less than £135 can be found by visiting VAT Rates.
The commercial invoice value is usually accepted as the normal price, but if a preferential arrangement has been established between the overseas supplier and the importer or an unrealistic value has been declared, His Majesty’s Revenue and Customs (HMRC) reserves the right to assess a fair market value for duty purposes. The duty is payable at the time the goods are imported, but established importers can defer payment for an average of 30 days. In addition to customs duties on imported goods, an excise tax is levied on in-country sales of alcohol, tobacco, and road vehicles, and on sales of oil and petroleum products. The applicable import duty and excise tax rates can be obtained from U.S. Department of Commerce Export Assistance Centers or the UK Government’s Trade Tariff search.
Responsibility for meeting customs obligations at import falls on the importer of record. Incoterms – international commercial terms used for the cross-border movement of goods – establish the obligations of the seller and the buyer, including which party is responsible for import.
For example, under Ex Works (EXW), the buyer is responsible for everything from export clearance at the start of the journey to import clearance and payment of customs duties at the end of the journey. At the other end of the spectrum, all obligations are placed on the seller under Delivered Duty Paid (DDP). The importer of record will need customs data, systems, and resources in place to manage the associated compliance responsibilities.
To view Trade Tariffs, commodity codes, duty, and VAT rates, please visit HMRC’s Tariff Commodity Look-Up page.
To look up duties and tariffs use, use the Customs Info Database tariff look-up tool, available on trade.gov (free registration required), to estimate duties and taxes.